SMB Training Blog

Is it me or the market I am trading?

Hi Bella!

How are you? Probably you don’t remember me. My name is Andre and I am a Brazilian futures trader. We talked a few times in the past via email. I have read all of your books and others which you quote, like Brett Steenbarger.

I am trading since 2009. I had great results in the past, especially in the first 4-5 years. However, from 2015 on my results dropped and I am having a bad time trying to solve this.

Right now I am flat in the year. I know that as a trader I should focus on the process instead of the results. However, a few years of sample should be enough to take the results as a proof of process evolution.

I see myself now as a much better trader than I was in the past. Much more experienced, much more willing to take risk on the right occasions, more patient, more disciplined and with much more market time. However, my results don’t show me that I am right thinking this way. How do you see this question?

Is it normal to face difficulties like the ones that I am facing right now?

I am not talking about one bad week or one bad month. I am talking about 6 months, one year…Do you think is time for me to change the market I am trading?…….(edited)

@MikeBellafiore

It is entirely possible to improve as a trader and for your results not to improve.

It is common for futures traders to consider more than one product. For example, Merritt Black who runs our futures chat room, trades mostly oil but also branches out to S&P futures. It is common for traders to develop an edge and then look to express that edge in different products and markets.

Generally a trader will discover what they do best and then research how this edge will perform in another product or market. For example, you might take your favorite trade in Brazilian futures and test it with S&P futures. If you find edge, then you expand how you express your best trade to another product.

I do remember one large day of trading opportunity in the Brazilian futures this year, when the presidential corruption scandal broke. We were all trading our Brazilian ETF products in the states (see EWZ chart below).

Or even better was BRZU.

But you are right to measure how you are trading based on opportunity set and not PnL.

6 months of underperformance as a trader is time for analysis for most traders. Generally the shorter your time frame the more consistent one is with their trading. So unless you are a value trader, it feels like you should start asking some questions about how you are approaching markets.

This will make for a terrific conversation next week, when you appear as our trading guest with Merritt and me, during our webinar here.

Questions to consider:

Is the opportunity set not present in your markets or are you underperforming?

Have you sought to express your best trades in other products and markets?

Are you working with a coach or mentor who is reviewing your trading?

Have you develop a PlayBook, with your best trades, to stand as your trading business?

What can you add/subtract/improve to your trading process so you are performing at your best as a trader?

Are you actively working to diversify your trading so that you have multiple ways to attack markets?

What work are you doing with technology, to arm your trading with more opportunities?